Accelerated tariff elimination is possible under provisions of the U.S.-Canada FTA - Free Trade Agreement

Business America, Jan 30, 1989 by Karen Homolac

The U.S.-Canada Free Trade Agreement (FTA) provides for the removal over the next ten years of all tariffs on bilateral trade. For tariff removal purposes, all dutiable products are assigned to one of three staging categories: immediate tariff elimination on Jan. 1, 1989; five annual reductions of 20 percent; or ten annual reductions of 10 percent.

In addition, Article 401.5 of the Agreement introduces an element of flexibility by providing a tariff reduction accelerator clause. Contingent upon the mutual agreement of both governments, the provision allows individual businesses or industries on either side of the border to request that the duty on specific goods be reduced earlier than designated in the FTA.

The Office of the United States Trade Representative (USTR) will lead the interagency review of all petitions received from interested parties. A notice outlining the petitioning procedure was published in the Federal Register on Jan. 23, 1989, under United States Trade Representative (ref: 54FR3175). The deadline for submission of petitions to be considered in 1989 is Feb. 21, 1989.

Careful consideration will be given to each petition and advice sought from private and public advisory committees prior to being accepted for consultations with the Canadian Government. If agreement between the United States and Canada is reached regarding the product, the agreed upon accelerated tariff elimination schedule will become effective Jan. I of the following year. This procedure will be implemented on an annual basis until 1996, with requests to be submitted by Jan. 1 of each year.

Substantial product and statistical information is required from the petitioner. The following information should be included:

(1) Requester's name, organization, address, contact individual, telephone number, and date of request;

(2) Product on which accelerated duty elimination is requested and whether the request pertains to the United States or Canadian import duty or both,

(3) United States and/or Canadian Harmonized System subheading numbers at the eight-digit level along with the product description of the subheadings;

(4) Whether the request is for all products covered by the tariff subheading listed in (3) above or only the product identified in (2) above;

(5) Requester's exports to and/or imports from Canada for each product in the most recent three-year period for which data are available;

(6) Current staging of the tariff elimination for each product or tariff subheading;

(7) Requested accelerated date of the tariff elimination, and reasons for requesting accelerated tariff elimination;

(8) Requester's projected exports and/or imports for the product if tariff elimination is accelerated as requested; and

(9) Names and addresses of known U.S. manufacturers of the products in question.

Petitions should be forwarded with 10 copies to the Office of North American Affairs, Office of the U.S. Trade Representative, Room 501, 600 17th St., NW., Washington, D.C. 20506.